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¹School of Management, University of St Andrews, St Andrews, UK

Correspondence to: R Bradley MacKay, School of Management, University of St Andrews, St Andrews, UK, KY16 9AD, UK. Tel: +44 1334 46 1972; Fax: +44 1334 46 2208; E-mail: rbm2@st-andrews.ac.uk

Strategic management literatures have contributed significantly to our understanding of strategic decision-making, strategy formulation, strategy content and process. However, research into strategy context has been spasmodic, less interrogative and non-systemic. Hence, the relationship between context and both the content and process dimensions is not well understood. Recently, many organizations have been turning to scenario thinking methodologies to explore, facilitate and foster a linkage that enables better strategy content to develop. Scenario thinking has enhanced environmental sense-making in many organizations. But, such processes have come under increasing criticism for missing weak signals and emerging patterns in the underlying drivers of future change. This paper examines the reasons for these flaws by reference to recent developments in the cognitive psychology literature. It then investigates the strengths and weaknesses of using counterfactual reasoning as a tool for reducing the main biases that lead to foresightful thinking failures.

European Management Review (2004) 1, 69-77. doi:10.1057/palgrave.emr.1500010

scenario thinking; counterfactual reasoning; context; bias